What Is A Subscription Merchant?

What exactly is a subscription merchant? Is it something you should consider for your ecommerce store?

Subscription merchants offer recurring payments for services or products over time. They include things like magazine subscriptions, gym memberships, and music streaming.

Subscription merchants are becoming increasingly popular because they allow customers to pay for their purchases without having to worry about credit cards or cash.

With the rise of mobile shopping, many people have started using apps instead of websites when making online purchases. This means that there’s an opportunity for subscription merchants to reach new audiences through mobile devices.

If you want to learn more about how subscription merchants can help grow your business, keep reading!

Subscription Merchants: The Facts

Over the last 7 and a half years, the subscription economy has grown by an eye-watering 350%. This figure alone is a testament to the time and hassle they save us, and why they’re so popular.

The SUBTA’s State of The Subscription Commerce Economy Annual Report stated that in 2019, 18% of the $41 trillion in credit card transactions was made up from the global commerce subscription economy. 

This represents a massive increase on 2017 figures which showed just 9% of all credit card transactions were made via subscription.

In 2018, the number of people who used subscription services increased by 4%, with the biggest growth coming from millennials.

Who Might Need A Subscription Merchant Account? 

The main reason why a business needs a subscription merchant account is because they either sell physical products or give access to content/services. 

A subscription merchant account allows them to accept payments from their customers on a recurring basis. However, the customer only needs to authorize the payment once. 

This includes monthly, yearly, quarterly, etc. 

It also gives them the ability to set up automatic billing cycles, so they don’t need to manually bill each month. 

How Do You Choose The Right Subscription Merchant Account For Your Business? 

There are two types of subscription merchant accounts: 

1. Recurring Payments Gateway (RP-GATEWAY)

These are gateway providers that connect with other third party systems to process transactions. 

2. Payment Processor (PP)

These are companies that specialize in processing payments. 

You will need to choose between these two options based on what type of service or product you’re selling. 

You may also be able to use both at the same time if you have multiple services or products. 

How Does It Work?

The beauty of subscription merchants is that they let customers make monthly payments for goods or services without them ever needing to leave their app or website.

This makes it easier for customers to purchase items from your store on the go, which is great if you sell physical products.

You may also be able to use subscription merchants to collect customer data, such as email addresses and phone numbers.

This information can then be used to send out promotional emails and text messages, which can lead to increased sales.

It’s important to note that not all subscription merchants work in the same way. Some only allow users to subscribe to one product at a time, while others will let customers choose what they want to buy each month.

Some even allow customers to cancel their subscriptions at any point.

Before signing up with a subscription merchant, check whether they offer these features.

Why Should I Use One?

There are several reasons why you might want to sign up with a subscription merchant.

One is convenience. If you already own a smartphone, tablet, laptop, or desktop computer, chances are you’re familiar with apps.

Apps are easy to set up and use, so they’re perfect for those who don’t want to spend too much time setting up payment methods.

Another reason to use a subscription merchant is that it gives you access to new audiences. Many people now prefer to shop via mobile devices rather than computers, meaning you could potentially reach new customers by offering a subscription service.

A third reason is that some subscription merchants give you access to exclusive deals and discounts. For example, Spotify offers special promotions every week, including free downloads and discounted prices.

Finally, if you run an ecommerce store, a subscription merchant can save you money. You won’t need to charge customers extra fees for paying by card, and you won’t need additional staff to process transactions.

What Does Continuity Subscription Merchants Mean? 

Continuity subscription merchants are similar to recurring payments gateways, but they differ in one key area.

With a recurring payment’s gateway, customers pay once per transaction.

However, with a continuity subscription merchant, customers continue to pay each month until they decide to stop.

These types of merchants use the subscription billing method as their main billing type. 

The customer is charged on a monthly basis for goods or services they have opted to receive regularly. 

For example, a customer may opt to receive a magazine every month. They would then be billed each month for the cost of the magazine. 

When they cancel their subscription, the customer would need to inform their bank and the merchant that they have decided to cancel the subscription. 

Depending on when the customer cancels in their billing cycle, some merchants will refund the difference of the subscription or even issue a full refund. 

Conclusion

Subscription merchants enable businesses to take and process recurring payments for goods/services based off of a single authorization.

They also provide a convenient option for customers who wish to purchase goods or services regularly.

If you’re looking for ways to increase your revenue, look no further than subscription merchants.

They’re convenient, affordable, and can help you grow your business. However, there are different types of subscription merchants, so make sure you know which ones suit your needs before signing up.

We hope this information has been helpful – thank you for reading!